This invention relates to authentication of commercial paper, and, in particular, to techniques used on commercial paper to resist fraud.
Validation of commercial paper, such as checks, presents a significant challenge for financial institutions. With the availability of reproduction technology, such as color scanners and color copiers, criminals are provided with inexpensive ways to produce counterfeit checks and false identification that can be used to defraud financial institutions, such as banks, thrifts, savings banks, credit unions, and check cashing institutions.
To combat fraud, various techniques have been developed. For example, checks often contain information about the account and the value of the paper, and special patterns and designations are applied to the check to discourage replication. Many of these older techniques are deficient in view of today's replicating technology, such as color copiers, scanners, and printers.
Some systems developed to combat check fraud require investment inspired equipment for the payor and the financial institution. Consider, for example, the system of U.S. Pat. No. 5,781,654 that uses a computer to convert the payee information, issue date, and MICR information to a check digit placed onto the check, and another computer at the bank to convert the printed payee information and issue date to compare the information to see whether the check has been altered. U.S. Pat. No. 6,073,121 discloses a system that prints encrypted machine only readable symbols on the check, and a special reader at the bank for reading the encrypted data. U.S. Pat. No. 6,390,362 likewise prints special codes (a bar code) on a check and requires a scanner at the financial institution to read the bar code. Such investment inspired equipment can be cost prohibitive to small payors and small independent financial institutions.
Another known system used to combat fraud is to mark the commercial paper with a controlled ink having the property of completely changing its color when viewed from the different angles. In particular, the controlled ink used is a proprietary optically variable pigment described in U.S. Pat. No. 6,521,036 to Bleikolm et al., incorporated herein by reference, and is distributed for use only in banknote and high-security federal document printing applications. However, optically variable pigment is highly controlled and cost prohibitive for use in ordinary commercial paper applications.
Some other security features are added directly to the checks. These security features include watermarks, copy void pantographs (when photocopied, the word “VOID” appears), chemical voids (chemical treatment of the check stock activated by eradicator chemicals to make the word “VOID” appear), high resolution microprinting, and three-dimensional reflective hollow stripes are just some of the examples used. Some of these techniques are expensive, others are not effective in view of today's replicating technology, and still others require an institution to handle chemicals for validation.
It is desired to provide commercial paper fraud protection techniques that do not require special equipment or chemicals to read or validate the commercial paper. It is also desired to provide techniques that can be used with existing check stock and that is readily available and relatively inexpensive to producers of commercial paper while remaining difficult to obtain by counterfeiters. It is further desired to provide fraud protection that prevent duplication, deters replication, and provides multiple, performing features that are easy to validate.